Taking turbines for a spin

More homeowners harness wind power to cut utility bills

By

DavidEnglander

NEW YORK (MarketWatch) -- Residential wind turbines are gaining acceptance with more homeowners looking to cut their electricity bills. Although they have been around for years in rural areas and isolated locations, they are spreading to the suburbs and, in some cases, even cities.

But harnessing the wind's power in order to generate your own doesn't come cheap. And because of site requirements wind turbines generally cannot be used by those whose homes sit on less than an acre of land.

"They are definitely growing [in popularity]," says Ron Stimmel of the AWEA, the national trade association for the wind energy industry. Sales of turbines that generate 2 kilowatts to 10 kilowatts of electricity, the smallest category of turbine and the ones most likely to be in residential use, have been rising nearly 25% annually, he said.

The rising cost of electricity has been driving wind-turbine sales. Homeowners in an area of high winds with a properly sited turbine can shave up to 80% off their monthly electricity bills, industry experts say.

But securing those monthly savings will take a hefty upfront investment. The turbines, including installation, can run anywhere from $12,000 to $50,000, with some models even pricier. One of the more popular models on the market, Southwest Windpower's Skystream 3.7, goes for $12,000 to $15,000 and can generate 1.9 kilowatts.

The newer turbines like the Skystream appeal more to the average consumer than their predecessors, which are largely battery operated and designed for "off grid" use.

"The Skystream has been taking off in this country," says Miriam Robbins, a representative for Southwest Windpower. "When we partnered with the Department of Energy to design the system, we wanted to create a turbine that was low cost, easy to install, and that met the demands of an everyday consumer."

Known as direct grid systems, these turbines can be plugged directly into the circuit breaker of a house. From there, they can be connected to the local utility's power lines. They function much like appliances, only they create energy rather than consume it.

Still, at those prices, it can take years to recover the cost of a system. In the most optimal example of a household that spends $200/month on electricity and realizes savings of 80% from a turbine, it would take almost eight years to recover the cost of a $15,000 system. A system can last 20 to 30 years, so depending on how long the payback, it could significantly cut down the electricity bill over its lifetime.

Homeowners in several states, though, can get help with the initial costs of buying and installing a wind turbine through rebates or tax credits. California was the first state to offer incentives in the 1990s. Since then, other states such as New York, New Jersey, Colorado, among others, have followed suit.

In New York, for instance, the state pays cash rebates. The size of the rebate varies widely depending on the model installed but in some cases can be over 40% of the initial cost. New York pays homeowners 65% of that rebate upon installation, and the other 35% once the turbine has been connected to the power grid and approved by the local utility.

Another incentive that is being offered in New York as well as other states is known as net metering, under which customers can get credits from utilities for any excess electricity that their turbine adds to the power grid. Those credits can help offset times of lax generation when the wind isn't blowing strongly.

When does it make sense?

For all its benefits, a wind turbine is not for everyone. Customers who are paying over 10 cents per kilowatt hour will benefit the most from having their own system. Any rate under that creates a longer payback period.

Most important is the wind in the area. According to Robbins, consumers should have at least 10-12 mph of wind in their area in order to consider a turbine.

The height of the tower on which the turbine sits is another crucial factor. The taller the tower, the stronger the wind will be. For an average turbine, the tower stands about 80 feet tall. Some can reach as high as 120 feet. The turbine should also clear all other surrounding surfaces, such as trees and roofs, by at least 20 feet. This will ensure a steadier, unobstructed wind supply.

"Don't put a turbine on the roof," says Stimmel. "No matter how good the turbine is, the wind will not be strong up there."

He adds that turbulence will even wear down the system.

Prospective consumers should also be aware that they will need about one acre of land, and knowledge of the zoning rules in their area. Some communities have height and building restrictions on property that may prohibit erecting a wind system.

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